CSA Scores Help Shippers Avoid Potential Lawsuits

While Compliance, Safety, Accountability program scores now play an important role in helping shippers choose the proper carrier for hauling their freight, a recent court ruling has raised new potential problems within the supply chain.

“Vicarious liability” is now on many freight executives’ minds, in the wake of a 2011 court ruling in the case of Sperl, et al. v. C.H. Robinson, et al., and could prove expensive not only for carriers but for shippers and logistics firms as well, according to industry experts.

As a result of that ruling, liability these days doesn’t stop with the carrier, said Steven Bryan, CEO of Vigillo LLC, Portland, Ore., a data-mining company that provides analysis of safety information in a scorecard format.

“Vicarious liability has become a fact of life because of the court decisions. It has become the law of land that brokers cannot escape liability by saying it’s the carriers’ responsibility. That argument is long gone,” he said.

In the Robinson case, an Illinois appellate court last year upheld a jury award of $23.8 million in damages against the Eden Prairie, Minn.-based freight broker, which ranks No. 6 on the Transport Topics Top 50 list of logistics companies in North America and tops the Transport Topics Top 25 Freight Brokerage Firms list.

The award was based on the finding that the company had hired an unsafe motor carrier. The firm was judged to be “vicariously liable” for the motor carrier’s and driver’s actions, even though at the time of the fatal accident, the motor carrier had a satisfactory Federal Motor Carrier Safety Administration safety record and the driver had a valid commercial driver license.

According to The Free Dictionary’s Legal Dictionary, which can be found on the Internet, vicarious liability is the legal doctrine “that places responsibility with one person for the failure of another, with whom the person has a spe-cial relationship, such as . . . the owner of vehicle and driver, to exercise such care as a reasonably prudent person would use under similar circumstances.”

And in an earlier case, Schramm v. Foster in 2004, a Maryland court found a 3PL guilty of hiring a carrier that caused an accident injuring two men.

Robert Voltmann, executive director of the Transportation Intermediaries Association, Alex-andria, Va., said “the courts have far overreached” in such recent cases, and shippers and 3PLs should not be expected to bear the additional liability.

“But only Congress can say that,” he continued. “So, in the meantime, we work with what the courts have said. All we’re doing is helping [3PLs] understand the system” and avoid lawsuits.

And Brian Everett, executive director of Nasstrac Inc., Waconia, Minn., said shippers and third-party logistics companies are taking more steps to check up on safety records because of the recent court rulings.

“We’ve heard from others that the C.H. Robinson case did more than any other event in recent history to raise the awareness of shippers and 3PLs to the importance of exercising due diligence in carrier selection,” Everett said.

Nasstrac, formerly known as the National Shippers Strategic Transportation Council, provides education and advocacy for shippers and carriers.

Vigillo’s Bryan said that brokers have learned to do “a pretty good job of due diligence” when choosing a carrier — and shippers are learning that, too.

“Shippers who in the past said, ‘We have brokers who place freight; we’re not in the freight business,’ see that they are at risk. [Plaintiff attorneys] are going after the very deep pockets,” Bryan added.

Vigillo’s core product is sold to carriers, Bryan said, but last year, the company released a product that allows shippers and brokers to vet carriers.

“It’s not only a selection process but an ongoing monitoring pro-cess,” he said.

“CSA scores are powerful marketing tools for carriers,” Bryan said. “CSA scores give a much brighter light for measuring performance record. It’s an accepted industry standard, and it’s available to everybody.”

The U.S. Department of Transportation’s FMCSA launched the CSA program in December 2010. The program’s centerpiece is its Safety Measurement System, which analyzes all safety-based violations from inspections and crash data to determine a commercial motor carrier’s on-road performance.

But losing a lawsuit should not be the only concern for shippers, Bryan added.

“An attorney told me that what is almost more problematic is the cost to defend the case, the discovery cost,” he said. “In a truck accident, if a driver does something wrong, somebody sues the driver. Then there’s discovery [concerning] the driver. Did the driver get enough rest?” and other factors.

“Then they go one step back and sue the trucking company,” he said, looking at safety records and at how the company hired and trained all its drivers.

Now, with the lawsuits going back even further, to logistics companies and to shippers, the discovery process “drills through the layers. . . . It goes deep into the operations. It can get very expensive,” Bryan said.

EBE Technologies, East Moline, Ill., offers CSA evaluation and management for trucking companies. Its Web-based CSA CarrierBoard gives shippers, logistics providers and carriers access to a carrier database that contains monthly updated CSA scores for more than 700,000 carriers with registered DOT numbers within FMCSA’s Motor Carrier Management Information System.

The system aggregates information from both its database — which contains all carrier inspections, violations and BASIC (Behavior Analysis and Safety Improvement Categories) percentiles — and the Carrier Census Information, which contains carrier profile and registration data.

“It was originally designed for logistics companies, but we found that many carriers wanted this tool,” said Cindy Nelson, EBE’s vice president of marketing and business development. “They want to be able to show their scores [to shippers]. They compare themselves to other carriers: What’s J.B. Hunt doing? What’s Knight [Transportation] doing?”

Transportation Safety Exchange Inc., Fairfax, Va., investigates carriers for shippers and 3PLs that subscribe to the company’s online database service. It also vets passenger motor carriers for organizers of passenger trips.

TSX’s pre-qualification screening looks into the carrier’s operational history, including verification of on-road performance data, operating authority, classification, insurance information, size, commodities transported, power units and drivers, said TSX President Patrick Labriola.

He said the company conducts an on-site investigation that covers all operational processes, training and management oversight that affect safety. The format is similar to the traditional compliance review, he said.

After TSX approves a carrier, it is subject to monthly performance evaluations. The data include crashes, and vehicle and established driver out-of-service information, he said.

Don Shepherd, safety manager for Abbott Bus Lines Inc. Roanoke, Va., said, “We’ve been through [Department of Transportation] inspections in the past, and the TSX inspection was much more thorough.”

The only CSA data used by TSX are the out-of-service violations and accident data, Labriola said.

Nasstrac’s Everett offered a similar observation, noting that, while many shippers and 3PLs do consider CSA scores in their carrier selection process, those scores show only part of the picture.

“There are other indicators that shippers or 3PLs use in selecting their carriers. The DOT rating is still the federally recognized determinant of carrier fitness, and most decision-makers or influencers in carrier selection consider DOT ratings as well,” Everett said.

In addition, he said, shippers and 3PLs consider insurance rates, and “some shippers also review financial and operational statistics.”

Many shippers formally review carrier safety quarterly, Everett said, but if there is any significant change in status, “such as the DOT rating moves from Satisfactory to Conditional, they then receive an e-mail informing them of the change.”

To promote understanding of the carrier-selection process, TIA has published the Carrier Selection Framework workbook “that helps members develop their own carrier-selection procedures,” looking at safety scores, licensing, insurance and years in business, Voltmann said.

CSA scores are “a tool” that should be used as part of that framework, he said.

“Are brokers and shippers looking at them? Yes, as part of the overall picture. But should they draw a straight line from them [to which carrier to use]? No.”

However, last year, Steve Gordon, Gordon Trucking’s chief operating officer, told Transport Topics in discussing CSA, “We’ll have to focus more diligently on a broader ranger of issues than ever before.”

Gordon identified General Mills, Wal-Mart, Procter & Gamble and Home Depot as some of the shippers his carrier serves regionally. 

At Interstate Van Lines, based in Springfield, Va., “We’re very attentive to our score. We work on it every day,” said President John Morrissette. “We compete against our peer group to be the safest carrier.”

And, in the case of Interstate, good safety scores also allow the company to retain one of its biggest clients — the Department of Defense. The relocation services provider transports household goods for members of the military and must maintain a satisfactory safety score to participate in the DOD program.

Brokers and shippers such as Target, Home Depot, General Mills and Procter & Gamble may have some understanding of CSA scores and other safety measurements, but that’s usually not the case with the many individual consumers who hire Interstate Van Lines to ship their household goods, said Glenn Begg, Interstate’s director of safety and compliance.

“Individual consumers aren’t educated about how to look for the profile of a company” and understand it, Begg said. “We need to educate the consumer” so that they value good safety scores, he said.